The sudden shutdown of LocalMonero shook the crypto community

LocalMonero, the largest Monero (XMR) peer-to-peer (P2P) trading platform, announced its closure on May 7. This also marked the end of a nearly seven-year run in the crypto space.

The shutdown comes against a backdrop of increasing regulatory and regulatory measures targeting privacy-focused cryptocurrencies and platforms in the United States. Indeed, these regulatory execs raise concerns about the future of privacy in the digital asset industry.

LocalMonero shutdown timeline and details

The notice details the period during which they will cut jobs. It includes an immediate halt to new registrations and advertising posts, as well as a shutdown of the platform until November 7, 2024. Additionally, the Local Monero team thanked its users and expressed its confidence in the future of the Monero ecosystem.

“LocalMonero exists for most of Monero's life. Fortunately, the Monero ecosystem has grown a lot in these years, and recently Haveno and other DEXs such as Serai, Atomic Swaps, the upcoming addition of FCMP (anonymous set of 16 rings replacing the entire blockchain) as well as continuing and accelerating the development of the Monero protocol. Above all, we are confident that the future of Monero will be bright with or without our platform,” wrote the LocalMonero team.

The platform has outlined clear steps for its users when LocalMonero stops operations. Effective immediately, new users cannot register, and starting May 14, no new transactions can be initiated. Users have until November to complete any transactions and withdraw funds from their accounts.

This completion time is intended to ensure a smooth transition for the community and prevent any funds from being stolen. However, the team is committed to supporting users through arbitration and dispute resolution during this period.

The platform's shutdown saddened many in the Monero community. Douglas Tuman, an active member of the Monero community and host of the Monero Talk podcast, expressed his grief over the loss.

“Sad to see you go. You guys have done great things for Monero. Thanks for your peer-to-peer business that brings Monero users together on your platform. Hope you come back in another form. Cheers!” Tuman said.

Following the announcement, the price of Monero dropped from $129.69 to $126.80. This is roughly a 2.23% discount. However, at the time of writing, the price of Monero is trading at $129.23.

Read More: Monero (XMR) Price Prediction 2023/2025/2030

LocalMonero's rise comes as broader regulatory challenges in the US affect other privacy-focused services. BeinCrypto previously reported that US authorities had arrested the founders of Zamora Wallet, Keon Rodriguez and William Lonergan Hill. They committed serious financial crimes.

US authorities have alleged that Zamora Wallet facilitated billions in illegal transactions and money laundering. Samurai wallet services such as “Whirlpool” and “Ricochet” have processed large amounts of bitcoins. They have generated millions in fees while providing financial anonymity to their users.

Moreover, Phoenix Wallet and Wasabi Wallet are suspending their services for US customers. This follows the regulatory enforcement issued against the Zamora wallet.

In August 2022, the Office of Foreign Assets Control (OFAC) imposed sanctions on crypto mixer Tornado Cash. At that time, OFAC also listed Tornado Cash as worth $7 billion.

OFAC's action has sparked debate in the crypto community. Many argue that the issue sets a dangerous precedent for privacy-focused software developers in the crypto ecosystem.

However, the market is currently monitoring legal proceedings against Tornado Cash developer Alexey Persev in the Netherlands. A verdict is expected on May 14.

Read more: How to buy Monero (XMR) and everything you need to know

The crypto community awaits the outcome of the Tornado Cash issue. Many fear it could threaten privacy-focused software developers in the ecosystem.